Week 9 - Nonlinear Regression
Content for week of Monday, March 21, 2022–Friday, March 25, 2022
Overview
Let’s make regressions faaaancy, with three new friends: polynomials, logarithms, and interactions!
Reading Guide
Chapter 8: Nonlinear Regression Functions
SW 8.1 A General Strategy for Modeling Nonlinear Regression Functons
Key takeaway here - think about the economic theory and its application to determine the best approach to modeling!
SW 8.2 Nonlinear Functions of a Single Independent Variable
Polynomials and logs. Note that this section includes only 3 ways of setting up equations: level-level, log-log, log-level. We’ll also cover level-log, because, why not?
SW 8.3 Interactions Between Independent Variables
Three types of interactions you should know:
- Binary-binary
- Continuous-binary
- Contnuous-continuous
Videos
This video talks us through polynomial and logarithmic regressions. We will do interactions (SW 8.3) entirely in class. Don’t forget to complete VQ8 on Blackboard!